Hedge Fund Manager Criticizes Yahoo for Wasting $3 Billion On Poor Acquisitions (businessinsider.com)

mrspoonsi writes: On Monday morning, Eric Jackson, manager of hedge fund SpringOwl, sent a brutal 99-page presentation to Yahoo's board, outlining his case for why the company should drop Marissa Mayer as CEO and find new management. Jackson points out that Yahoo has burned through $3 billion on M&A in the past three years since Mayer took the reins, which contributes to $10 billion in what Jackson calls Yahoo's misallocated capital. The value of all of those startups Yahoo has acquired, Jackson says, is worth nothing at Yahoo's current stock price. Jackson also points out that Yahoo has a history of buying up startups run by former Google APM members. While at Google, Mayer started the company's elite associate product-manager program. Of the 49 acquisitions Yahoo has made under Mayer's leadership, six were startups founded by ex-Googlers. The total cost of these six acquisitions is $319 million, according to Jackson's slide deck. Yahoo bought Polyvore in July for $230 million. Polyvore, a social commerce site that lets users make artistic collages of clothes and accessories...But Jackson does not mince words when it comes to Yahoo's decision to spend shareholder money acquiring Polyvore and companies like it. "It's not acceptable to pay $230M for zombie companies run by former APM members," he says, pointing out that Polyvore had raised $22 million in VC funding, was 8 years old, and had gone through multiple pivots. For all intents and purposes, it looked like a goner until Yahoo bought it.

Comments

Re:Marissa must be a prepper

[rtb61]

Hundreds of millions of dollars are not a solid, they are however a pretty profound hint of corruption and purchasing commissions. Offshore tax havens wreak havoc upon governments and even more upon corporations. You could imagine the chaos if those countries that funded offshore tax havens at enormous cost to those countries, demanded full details or threatened to cut off the tax havens by zeroing their currency, youch, a lot of very surprising people would end up in crowbar hotels and not friendly ones funded by offshore tax havens ;D. It could be the demotion at Google was for very good reasons, this prior to being 'er' politely retired.